The PASOK Period, 1982-1988
This chapter analyzes the economic development of Greece during 1982-1988. This period corresponds to Greece's first socialist government, hence the importance of isolating this period of modern Greek history and economic development from the rest. Under the leadership of Andreas Papandreou, the Panhellenic Socialist Party (PASOK) won a clear victory in the elections in late 1981. The party was re-elected, though not as decisively, in the mid-1985 elections.
It is argued in this chapter that in the face of the economic constraints of global economic slowdown and inflationary pressures at the outset of this period, the economic, foreign, and social policies of PASOK had significant potential in promoting independent economic development in Greece. The generally restrictive credit, monetary, and taxation policies through 1987 eased the inflationary pressures of the late 1970s and reduced speculative investment. Additionally, initial sharp increases in wages and salaries along with progressive taxation reforms contributed to the reduction of income inequality during 1982-1985.
The austerity measures of the Stabilization Program of 1986-1987 succeeded in reaching most of its economic targets of reducing the current accounts deficit, the public sector borrowing requirement, and inflation. Largely as a result of tighter income